The old adage in real estate that it only takes one buyer held true in the Canadian 700 MHz spectrum auction. After potential new entrants such as Verizon declined to enter the Canadian market and Wind Mobile dropped out of the bidding at the last minute, many declared the spectrum auction a failure. Industry Minister James Moore and the government got the last laugh, however, with the auction generating $5.3 billion and the emergence of potential new national wireless player – Videotron (parent company is Quebecor). There had been some speculation that Quebecor might make a move outside of Quebec (Nowak, Corcoran) and seeing the company scoop up prime spectrum in Ontario, Alberta, and British Columbia offers renewed hope for a more competitive environment.

Quebecor’s national wireless strategy remains a bit of a mystery. The arguments that this could lead to more competition are obvious: the CRTC’s 2013 Communications Monitoring Report notes that Quebec’s average revenue per user (ARPU), one of the wireless industry’s key metrics, is easily the lowest in Canada. In 2012, Quebec ARPU was $51.95, compared to $61.87 in Ontario, $63.56 in B.C., and $73.50 in Alberta. Moreover, Quebec had the highest percentage of population with access to four or more facilities-based wireless providers at 82 percent of the population (Ontario was next closest at 63%). The Canadian Media Concentration Research Project finds that Quebec is the least concentrated market in Canada (though still highly concentrated), leading to the conclusion that “if there is any vindication of the viability of the ’4th mobile wireless carrier’ strategy in Canada, Quebec is it.” In short, Quebec is the most competitive wireless market in Canada with four viable competitors and the prospect of extending that approach to Ontario, B.C., and Alberta would represent a significant change in the wireless competitive landscape.

The possibility of Quebecor becoming a national player does not end there. The government’s move to regulate domestic wireless roaming creates the possibility of more competitive new entrants who can piece together national networks comprised of their own spectrum plus roaming on competitor networks in markets where they do not operate. There is also the possibility of Quebecor accelerating a national move by acquiring Mobilicity or even making a play for Wind Mobile.

Yet despite the optimism, there is still some lingering doubts about Quebecor’s plans. The company’s press release states “given the way the auction unfolded, Quebecor Media could not pass up the opportunity to invest in licences of such great intrinsic value in the rest of Canada. We now have a number of options available to us to maximize the value of our investment.” In other words, this was relatively cheap spectrum given bidding restrictions on incumbents and the limited number other bidders that was too inexpensive to pass up ($233 million for seven licences in Quebec, Ontario, BC, and Alberta).

Moreover, the company’s success in Quebec may stem in part from its ability to offer bundled services that include wireless, Internet, cable television, and home phone. Quebecor will be hard pressed to match the bundled approach outside its home province. If the company is a wireless-only player in Ontario, B.C., and Alberta, it may face many of the same challenges as the other 2008 new entrants.

From a consumer perspective, the possibility of more choice is great, however Quebecor is another large vertically integrated company with incentives to favour its own content. For example, in 2011, the CRTC ruled that it violated undue preference rules when it gave its video-on-demand service exclusive rights to some of its broadcaster programs. The Commission ordered the company to provide the programs to Telus and Bell.

For the moment, Canada is still dominated by the big three, who unsurprisingly bought the majority of available spectrum. But the spectrum auction outcome offers a ray of hope to those seeking a national wireless player who could shake up the Ontario, BC, and Alberta markets. Quebecor has a footprint of 500,000 wireless customers in Quebec and it just acquired prime spectrum on the cheap. If the government maintains its commitment of regulating wholesale domestic roaming and tower sharing, there may be the necessary ingredients to entice Quebecor to take a shot at becoming a viable fourth player in Canada’s largest provinces.

If the government forces the other carriers to share their existing networks with Quebecor at regulated rates that isn’t facilities-based competition. In fact, it’s more like a MVNO.

What happened to Wind? Looks like Moore has already written them off and is trying to make it look like Quebecor has replaced them as Canada’s fourth national carrier. Politics is such a strange business …

Huzzah, another Bell-minded companySo our solution to the 4th provider that is different from Bell and the rest of the “oligops” is to promote… a company that essentially is a monopoly in its home province and as such acts very similarly to Bell and the rest of the “oligops”. If the goal here was to maintain group think/status quo, I guess they succeeded. Forgive me if this isn’t the catch-22 solution that the gov’t mouthpieces are current spewing (I hope I’m not a “radical extremist for saying this, Mr. Moore).

Also, Cynic is absolutely right. It’s very telling that the gov’t was pushing Wind for so long, then basically gave it no support in regards to foreign investment regulations, and then proceeded to dump it at the side like so much garbage. I guess that Quebecor will buy Wind Mobile now and the gov’t can then spin it into some sort of master plan.

They’re just going to sit on it and sell itCall me pessimistic, but after seeing Shaw do this very same thing last time around and then turn around and decide to sell their spectrum to Rogers, who is to say that Videotron won’t do this as well?

The proposal expects Internet users to provide “informed consent” that they “trust” intermediate sites (e.g. Verizon, AT&T, etc.) to decode their encrypted data, process it in some manner for “presumably” innocent purposes, re-encrypt it, then pass the re-encrypted data along to its original destination.

Chomping at the bit to sign up for this baby? No? Good for you!

Ironically, in the early days of cell phone data, when full capability mobile browsers weren’t yet available, it was common practice to “proxy” so-called “secure” connections in this manner. A great deal of effort went into closing this security hole by enabling true end-to-end mobile crypto.

Now it appears to be full steam ahead back to even worse bad old days!